- USD/TRY pauses five-day uptrend, seesaws around a fortnight high.
- Turkish energy authorities raise electricity, natural gas prices for 2022.
- Market sentiment dwindles with firmer US stock futures, T-bond yields.
- Turkish CPI for December, US Markit Manufacturing PMI should be watched for fresh impulse.
USD/TRY licks its wounds around $13.35 during Monday’s Asian session, after positing the heaviest yearly fall in two decades. In doing so, the Turkish lira pair ignores the downbeat news suggesting further strain to the national inflation.
As per the latest news Reuters, Turkey’s Energy Market Regulatory Authority raised electricity prices around 50% for lower-demand households and more than 100% for high-demand commercial users for 2022. The news adds, “Natural gas prices jumped 25% for residential use and 50% for industrial use in January, national distributor BOTAS said separately. The price rise was 15% for electricity-generating industrial use.”
Higher energy prices will challenge the Turkish government’s latest approach to battle inflation with out-of-the-box approaches. That said, the nation’s headlines Consumer Price Index (CPI) rose to 21.31% in November, expected 30.6% for December during Monday’s publish.
It’s worth noting that Turkish President Recep Tayyip Erdogan tried to regain voters’ confidence ahead of the 2023 elections as the latest polls raise fears for the national leader. "We have been waging the battle to save the economy from the cycle of high interest rates and high inflation," said Erdogan per Reuters.
Elsewhere, receding fears of the coronavirus variant from South Africa, namely Omicron, favor market sentiment at the start of 2022. However, an absence of major traders due to the holiday mood restricts liquidity.
Looking forward, Turkish CPI and final readings of the US Markit Manufacturing PMI for December may offer intermediate clues to the USD/TRY prices.
Technical analysis
USD/TRY’s latest pullback fails to comply with the receding bearish bias of the MACD and the quote’s sustained trading beyond the 21-DMA, which in turn suggests the quote’s further advances.
Even so, the 50% Fibonacci retracement (Fibo.) level of November-December run-up, near $13.95, can challenge short-term USD/TRY upside. Following that, the mid-December peak near $14.65, will precede the $15.00 round figure to lure the bulls.
On the contrary, a downside break of the 21-DMA level of $13.35 will direct the sellers towards the 61.8% Fibo. level near $12.85, a break of which will direct USD/TRY prices towards the 10-DMA support of $12.29.
Overall, USD/TRY remains in the recovery mode with the short-term upside likely limited.
USD/TRY: Daily chart
Trend: Further recovery expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.